The Centers for Medicare & Medicaid Services should prioritize fingerprint-based criminal background checks and conduct site visits to high-risk providers to mitigate Medicaid fraud, a government watchdog official said Wednesday.

CMS has agreed with the HHS Office of Inspector General recommendations but has extended the deadline for implementing the background checks, Brian P. Ritchie, Assistant Inspector General for Audit Services, testified Wednesday before the Senate Committee on Homeland Security and Governmental Affairs. CMS announced a series of Medicaid fraud initiatives Tuesday in advance of Ritchie’s testimony.

Among the woes for Medicaid is that eligibility for beneficiaries is not always verified correctly, Ritchie said, leading to a possible $1.2 billion in incorrect payments. OIG said that in three states more than an estimated $655 million was made on behalf of more than 413,000 ineligible beneficiaries and another $580 million in federal Medicaid reimbursement was made on behalf of more than 183,000 potentially ineligible beneficiaries.

Challenges for Medicaid program administrators include that enrollment data systems often lack the ability to deny or terminate ineligible beneficiaries, or to redetermine eligibility when a beneficiary has aged out of an eligibility group.

Ritchie also noted that, while 80% of Medicaid beneficiaries now receive part of all of their services through managed care, OIG found managed care encounter data — records of services delivered to beneficiaries — was often incomplete. CMS had made some progress in addressing this issue, such as including “regulatory requirements, guidance, and an ongoing data quality monitoring review of submissions of encounter data through T-MSIS,” Ritchie said.

“However, the Department must do more to ensure that the data necessary to support program integrity in Medicaid managed care are complete, accurate, and timely,” he added.

Medicaid is the largest payer of long-term care services in the U.S. and serves 67 million beneficiaries overall at a cost of around $600 billion.